German cars, well pretty much all German engineering actually, has a world class reputation. At germancarsforsaleblog.com we are testament to the high class manufacturing of the Germans – they are just built exceptionally well and last a long time and have a good resale value. But why is this?
All owners of German cars will tell you the same thing – although their cars may look and drive better than many other vehicles, that is not what attracts them. Reliability is the name of the game. Whether you’re driving a Volkswagen in Virginia or a BMW in Birmingham, England you’re going to appreciate the fact that you have to call out the AAA or RAC far fewer times than your friends in non-German cars.
According to a new article, the secret to this success lies in the German approach to labor relations. In A Tale of Two Systems by Kevin C Brown at Remapping Debate, the German approach goes against conventional wisdom that suggests lower wages makes for a more competitive auto industry, instead his research suggests that higher wages and greater cooperation between unions and employers is the key to success.
Amazingly, or perhaps not, the average German motor worker gets paid twice as much as their American equivalent. Despite this, German car companies produce twice as many cars as US companies and they all operate at a profit – no needs for government bailouts over there.
There are two institutions that account for this state of affairs. Firstly, the German car workers unions, IG Metall, uses an elaborate system of conflict resolution that means they hardly ever strike. This is despite the fact they have the right to strike and most all workers are members of the union. Secondly, the German constitution allows for ‘works councils’ in every factory which hashes out problematic issues.
It all sounds rather good doesn’t it? When Forbes refers to the situation as a “happy relationship”, you have to wonder. After all, Forbes is hardly an organ of the Communist Party.